Picanol NV, a Belgium-based textile machinery manufacturer, has secured a victory in an intellectual property dispute with an unnamed Chinese textile machinery company (unnamed because the judgement is not public, only a news report has been released). The case is unusual because a Chinese court granted an interim injunction, and because the Shanghai No. 1 Intermediate People's Court enforced criminal sanctions against one of the Defendant company's executives. The Defendant was also liable for a 100,000 RMB fine.
Picanol NV sued the Guangdong-based company for infringement of its intellectual property rights. In a public statement the general manager of Picanol NV China said that the similarity of the products could confuse customers and thereby cause Picanol to lose out on sales. On 3 June the Belgian company applied for an injunction to prevent the Chinese defendant from showcasing their infringing products at a textile machinery convention in Shanghai. Interim injunctions are rarely granted in China because the evidential burden to prove imminent infringement is very high. However, in this case an injunction was granted in Picanol's favour forbidding the Chinese manufacturer from exhibiting the products in question at the convention.
However, the Chinese defendant ignored the Shanghai Court's injunction and proceeded to display its infringing goods along with a notice inviting the public to compare them to Picanol NV's product. The Shanghai No. 1 Intermediate People's Court ordered the detention of the Defendant's sales and marketing director for 10 days and imposed a 100,000 RMB fine (a not insignificant sum by Chinese courts' standards). A Court official said: "Disobeying the Court's ruling and posting the open notice constitute contempt of court... after the evidence was collected the company was punished for its conduct".
There is no doctrine of precedent in the Chinese civil law system and it is normal for different courts in different provinces and cities to adopt different practices. The next challenge will therefore be to see which, if any, other Chinese courts take heed of this case when ensuring that their own decisions are enforced